By Jeremy Leggett
Thursday, May 01 2014
Their research leads them to the view that we are “predictably irrational” in our thinking, individually and collectively.
This is a sobering analysis that most of us will immediately be inclined to reject, since another finding of neuroscience is that we tend to hate uncomfortable narratives. We much favour the comforting versions. Indeed, we are so predictably irrational that where a comforting narrative doesn’t exist, many of us tend to invent it.
Let us test these thoughts by looking at developments in energy and world affairs in recent weeks. Russia has invaded Crimea. The US and the EU are aghast. Hawks advocate a return to the Cold War, talking of an “energy weapon” with which to face down Vladimir Putin: exports of plentiful American oil and gas to Europe.
The US is, after all, well on its way to becoming Saudi America, self-sufficient in oil and gas, so the oil and gas industry professes. Hence, it can rid Ukraine, and others in Europe, of dependency on Russia’s pipelines.
This narrative has spread with the speed of a viral infection on both sides of the Atlantic. Pause for a touch of rationality, a few top-line facts.
The US consumes 18.5 million barrels per day (bpd) of oil. It produces 8.9 million bpd. Just which parts of that equation will it generously export?
Ah, but America is fracking vast amounts of oil from shale, I hear the hawks saying. National production will exceed consumption soon.
Will it indeed. The US has lifted production by a little over two million bpd in recent years, and done that by relying on shale regions where many of the sweet spots have already been drilled. That is why some people who are seeking to be rational predict declining overall US oil production from shale, starting in 2016.
Then what about gas? There is just so much American gas production — that can surely be exported and used in transport?
Yes, there is a lot of American gas. But not enough for significant exports. Conventional production has been dropping for years. Shale-gas production has reached its peak and is dropping, in every one of the major US productive areas save one, the Marcellus Shale of Pennsylvania. When that peaks — expected soon by some observers with a taste for numbers — how is US production going to be maintained?
Because billions are being invested, cry the hawks. This is a bonanza!
It is a bonanza in your world of hype. In the real world, there are some inconvenient truths: $35bn of past investments have been written off by 15 of the main companies involved in shale since the “boom” began. Investment is falling fast as investors begin to smell a rat.
But let us not allow mere facts to get in the way of a comforting narrative. On 26 March the presidents of the European Council and the European Commission implored Barack Obama to free up some oil and gas exports to help them in confronting Putin.
Obama did not rule out such a generous act. However, the Europeans should get on with their own fracking programmes as well, he said.
Had a novelist dreamt all this up a decade ago, he or she would have been dismissed as an unrooted fantasist. But for sad energy-watchers like me, these days life seems stranger than art on a recurrent basis. It really does look as though those neuroscientists have a thing or two to teach us.
In the UK, half the government is desperate to frack its way to prosperity. One day in January, Prime Minister David Cameron went to the World Economic Forum and announced that he would be bringing manufacturers back to Britain with cheap fracked gas.
Wait a minute, PM, has anyone told you that American shale gas is only cheap because the industry is spending far more drilling it than it gets back from sales? The industry desperately needs a price rise. Otherwise, a huge bust could be just around the corner from the “boom”.
As for progress, the fracking industry in the UK is, by its own admission, years from any possibility of production — years wherein conservative rural Britain can easily gear itself up for the kind of protest that poses such great difficulties for wind power.
The true-blue protesters shouldn’t find it too difficult to find flash points. For example, the frackers are so desperate that they have lined up one of their candidate wells on a former munitions site. This is the truth.
And I mean, what could possibly go wrong fracking with explosives on a former munitions site, in a world in which rationality is predictably so rare, and where life is stranger than art?
All the evidence for this article can be found at www.jeremyleggett.net
Jeremy Leggett is founder and non-executive chairman of international PV company Solarcentury. His latest book, The Energy of Nations: Risk Blindness and the Road to Renaissance, is published by Routledge
|Download the 2016 Media pack
Recharge is a must-read for anybody wanting to stay abreast of renewables and puts advertisers at the heart of current debate. Media pack 2016
NEWS FROM OTHER NHST SITES
To protect your subscription investment, we've instituted a security system to protect against the electronic redistribution of copyrighted Rechargenews content. Read more